Tick Talk

With the majority of my equities liquidated in Dec. 2007 and the remainder liquidated in March 2008, I’ve been a passive (but noisy) witness to the carnage of capital this year. Given recent price action, I’m committing to devote 25% of my equities portfolio to suitable stocks over the next week or two. Granted, two weeks ago I lambasted Warren Buffet for his bullish remarks, but that was then and this is now.

I am NOT calling a bottom. If the market sells off again, I will Martingale another 25% at the next major Fibonnaci retracement and so forth until the full 100% of my equities money is invested (my last 25% would theoretically be invested at the price of zero). Because of the values preserved from liquidations in December 07 and March 08, I have greater leverage monetarily and psychologically for future events.

The strategy I will deploy has trilinear profit vectors with limited upside potential (about 6%-10% per month). If stocks trade flat, it will outperform the market (by 3%-5%). The downside risk is moderately mitigated (same 3%-5%) but with the conviction to “ratio in” at the next major Fib. level, any losses will be short lived as income revenue more than doubles. If this is in fact the bottom, I will scale in to intermediate term bottoms. Some call this “buying the dips.” 

Oh, and my decision has nothing to do with the election results. However, it may benefit from those who needed election certainties in order to get off the sidelines. With that topic at hand, I’m sure that the new Commander In Chief is so happy with his victory that it feels like an extra birthday this year. As such, here is Marilyn Monroe to serenade him: